Virtually all segments of Savannah's economy are expanding, and the number of jobs will climb faster here than in any of the state's other Metropolitan Statistical Areas, P. George Benson told more than 500 Savannah business people Friday.

In 2007 alone, Savannah will add 4,200 jobs, Benson added.

Benson's projections were part of the annual Savannah Economic Outlook luncheon at the Westin Savannah Harbor Golf Resort and Spa on Hutchinson Island.

Savannah's local economic growth projections mimic the statewide trend, which is expected to continue improving but at a slightly slower pace next year, said Benson, outgoing dean of the University of Georgia's Terry College of Business.

"While we won't dodge the economy's slowdown, Georgia will outperform the nation in 2007," he said.

Georgia's inflation-adjusted gross state product is expected to increase 3.3 percent next year - a full percentage point lower than the state's anticipated 4.3-percent growth this year, but also a full percentage point higher than the 2.3 percent growth expected for the nation next year.

Although Savannah's 2007 job growth is projected at 2.7 percent, statewide job growth will drop from a projected 2 percent this year to 1.5 percent next year.

But even at 1.5 percent, Georgia is expected to bounce back into the top 10 states for job growth in 2007.

That will be some of the best growth in years. It was eighth in 2000, then dropped to 24th in 2001 and skidded to 43rd as the recession deepened in 2002, he said.

"As Georgia's companies restructured and cut costs, the economy began to turn around," Benson said. "In 2003, our state growth ranked 38th, then 21st in 2004 and 14th last year.

"When the final numbers are in this year, we should be back in the top 10.

"And, next year we could move up one or two more spots."

The focus of a national economic slowdown in 2007 will be mostly in the housing and manufacturing sectors, Benson said, adding that Georgia's housing industry is suffering not so much from soaring mortgage rates or overheated home prices as from what he called "a crisis of confidence."

"In some areas, where home prices have gone up 50 percent or more in five years while income has risen only 25 percent, there is a very real problem," he said. "But the Georgia housing market has never overheated, boasting a healthy 3 percent differential between the rise of home prices and the rise of income."

And, again, Savannah is faring better than the rest of the state.

"Savannah has yet to see any real downturn in housing prices," he said.

"In fact, building permits in Savannah were up 25 percent in October, while they were down 16 percent in the state."

Still, fear and speculation about possible major price corrections in other states tend to lower the confidence of homebuyers everywhere, Benson said.

"For Savannahians who can see beyond the uncertainty, this may be a good time to find a good deal in what is fundamentally a solid market for single-family housing."

As far as manufacturing goes, there's more good news for Savannah, said Michael Toma, director of the Center for Regional Analysis at Armstrong Atlantic State University.

"While Atlanta has been losing manufacturing jobs, Savannah has been growing them," Toma said, citing his regional Economic Monitor for the third quarter.

"For the first time in a long time, Savannah added more jobs in the manufacturing sector than in the service sector," he said. "We're on safe ground in that respect."